• Uestion 2 Frankel Ltd..a British merchandising companyis the exclusive distributor of a product that is gaining rapid market acceptance.The companys revenues and expenses (in British poundsfor the last three months are given below: Frankel Ltd Comparative Incorme Statements For the Three Months Ended June 30 April Sales in units. 3,000 Sales revenue.. 420,000 Cost of goods sold. 168,000 Gross margin. 252.000 Selling and administrative expenses Shipping expense.. 44,000 Advertising expense. 70,000 Salaries and commissions 107,000 Insurance expense. 9,000 Depreciation expense. 42,000 Total selling and administrative exp 272.000 Net operating income(loss... 20,000 May 3,750 525,000 210,000 315.000 June 4.500 630,000 252.000 378.000 50,000 70,000 125,000 9,000 42,000 296,000 19,000 56,000 70,000 143,000 9,000 42.000 320,000 58,000 (Note:Frankel Ltds income statement has beon recast in the functional format common in the United States.The British currency is the pound,denoted by ) Required: 1.Identify each of the companys expenses (including cost of goods soldas either variable.fixed.or mixed. 2.Using the high-low method,separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. 3. Redo the companys income statement at the 4,500-unit level of activity using the contribution format.